C2006/169, Transcript of Proceedings [2006] AIRCTrans 1244 (29 November 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 16100-1

COMMISSIONER ROBERTS

C2006/169

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
AND
MINING AND MAINTENANCE SUPPORT PTY LTD
s.170LW pre-reform Act - Appl’n for settlement of dispute (certified agreement)
(C2006/169)

SYDNEY

11.38AM, MONDAY, 13 NOVEMBER 2006

PN1

MR K ENDACOTT: I appear for the Construction Forestry Mining and Energy Union, Mining and Energy Division, Northern District Branch.

PN2

MR G GARVIN: I appear on behalf of the company, with me MR S UPWARD.

PN3

THE COMMISSIONER: Thank you. Mr Endacott?

PN4

MR ENDACOTT: Thank you, Commissioner. Commissioner, this application is an application to have the dispute resolution processes conducted under a pre reform industrial instrument which in this case is a division 3, section 170LS certified agreement over a dispute that has arisen between the respondent company, Mining and Maintenance Support Pty Ltd, and the CFMEU Mining and Energy Division. The dispute concerns the operation of the interpretation of the certified agreement, specifically clause 22. That part of the certified agreement that deals with an employee's entitlement to long service leave.

PN5

The certified agreement is known as the Mining and Maintenance Support Certified Agreement 2005. It was certified by the Commission as presently constituted on 13 April 2005 and has a nominal expiry date of 12 April 2007 which means the certified agreement is currently within its term. The certified agreement is a stand alone agreement, for want of a better description, in that it provides at clause 5 and at clause 6 that it replaces all existing arrangements, including contracts, letter of appointment and verbal agreements, and I'm paraphrasing the operation of the clause. Ultimately the exact operation of the clause, Commissioner, is read from its terms, and at clause 6 the relationship with the award which basically says this agreement, except we state it otherwise and is in full substitution for the award and all other awards and agreements that may purport to cover the employees covered by the agreement.

PN6

Mining and Maintenance Support Services is a company that works predominantly in the coal mining industry by supplying labour in the form of operators of plant and heavy equipment on mining sites and works - I won't say exclusively in the northern districts - but has substantial presence within the northern districts coal fields of New South Wales and predominantly operates an open cut mining operation, if not exclusively open cut mining operations. As is required the terms of the certified agreement contain a disputes avoidance and settlement procedure that's provided for in clause 8.

PN7

Certainly in the application, Commissioner, we've indicated that those steps of the procedure that have been followed and the ultimate step was a meeting conducted between myself, Mr Upward that's here today from the company, and the company's IR consultant, Mr Greg Garvin, who is also present and that was conducted at the union's offices on 25 October 2006 and at the conclusion of that matter the issue in dispute was not resolved. But you'll see, Commissioner, from clause 8.6 that - - -

PN8

THE COMMISSIONER: What bout 8.5, before that?

PN9

MR ENDACOTT: Yes. Well, 8.5 gives the party an ability to be able to appoint a mutually acceptable mediator. In this case, I think the parties agreed that it should go to the Commission, and the ability of the Commission to be able to resolve the matter is set out in 8.6, which is, if the parties cannot agree on, accept or mediate, the matter will be referred to the Australian Industrial Relations Commission for conciliation and/or determination. So we say that the Commission has within its power, should it be a matter that properly falls under a dispute arising out of the interpretation of the operation of the agreement, that the Commission is capable of determining the matter.

PN10

As I repeated at the commencement of my submissions, it concerns the operation of clause 22, the Long Service Leave clause, so I may take the Commission to that clause and what we submit are the relevant parts of the clause before outlining the circumstances of a Mr Miller. Clause 22, long service leave, at 22.2.1, which is under the heading 22.1, which is entitlement, says, not unusually for the coal mining industry, Commissioner:

PN11

Employees accrue long service leave at the rate of 13 weeks for each eight years of continuous service in the coal mining industry. After the completion of each additional 64 weeks of continuous service, a further two weeks of long service leave will be accrued.

PN12

Now, as the Commission would be aware, the coal mining industry provides the standard of 13 weeks for eight years of service, not with a specific employer, but in the coal mining industry and certainly 22.1.1 is reflective of that industry entitlement. Now, importantly in determining employees' entitlement you must ascertain not only the years of service in the coal mining industry, but the years of continuous service and 22.2 deals with the issue of continuous service and we say, materially, that the only circumstances that would arise in Mr Miller's case is at 22.2.5 which says:

PN13

Any break in service because of a change not exceeding three months -

PN14

and then the next one says:

PN15

A longer period as agreed between the union and the employer organisation or as determined by the Australian Industrial Relations Commission.

PN16

The example I'll take the Commission to, Mr Miller, he never had a break exceeding three months other than when he was retrenched and re-employed which I'll take you to later, because that's an exemption with respect to that regard. If I now take the Commission to 22.3 it says when long service leave may be taken, and this is at the bottom of the page, the clause, at page 8, it says:

PN17

The first accrual of 13 weeks on long service leave may be taken at any time provided that -

PN18

and then it sets out three tests and I'm not going to go into detail about them. The Commission can read that for themselves.

PN19

In the case of Mr Miller it's not that none of the tests have not been met. It's an issue that the company does not believe he has eight years' service for the purposes of being afforded 13 weeks' long service leave. 22.4, payment. Well, it makes it quite - a very simple description and this is a bit of a modification from the industry entitlement or the award entitlement which is basically ordinary hours plus bonus. This one here just provides at 22.4.1, payment will be made as normal. So basically you take your long service leave, you get paid as if you'd be on the shift.

PN20

Then I'll take you to 22.7, which is where I just mentioned earlier, Commissioner, about, in the case of Mr Miller there was one break of greater than three months but it was for a period of retrenchment and it provides at 22.7.1, an employee who is retrenched and has accrued long service leave, is to receive credit for such prior service on re-employment. Now, we say that an abridged description of an employee's entitlement, once they have eight years continuous service in the coal mining industry, they're entitled to 13 weeks. Now, if I take the case of Mr Miller, and what I may do, Commissioner, is tender four documents, one being the purported Auscoal Superannuation who administers the industry long service leave fund, which is a fund that reimburses employees if they pay an employee out long service leave, industry service record and correspondence between the CFMEU and the company.

PN21

Now, the Commission would have been provided, and I'll take the Commission to the correspondence initially, with three pieces of correspondence. One piece, one of those pieces of correspondence is a letter from myself to Mining and Maintenance Support dated 4 October 2006 which concerns Mr Miller and his application for long service leave. The second correspondence is dated - - -

PN22

THE COMMISSIONER: Do you wish these documents marked?

PN23

MR ENDACOTT: Only for information. The second document, Commissioner, is correspondence in reply from Mining and Maintenance Support which is under the name of Pegasus Employment, and the third piece of correspondence is a further correspondence from myself dated 18 October 2006. Probably the material pieces of correspondence are the 4 October and the 18th, which is my correspondence, and I say that not because my correspondence should be given more weight, but essentially the company's 11 October 2006 correspondence is basically saying, can you give us more details.

PN24

If I can firstly take the Commission to the 4 October 2006 correspondence, you will see that in the first paragraph of that correspondence, Commissioner, I indicate that I'm writing for and on behalf of the member and making reference to the fact that it concerns an employee's entitlements under the award. The second paragraph in that correspondence deals with the specific clause that the correspondence concerns, and I'll just read that. It says, clause 22, long service leave of the agreement affords Mr Miller 13 weeks' long service leave for eight years of continuous service in the coal mining industry.

PN25

Mr Miller has in excess of eight years' continuous service, as continuous service is defined in the agreement. Then it goes on:

PN26

Accordingly Mr Miller commenced employment in the coal mining industry on
9 October 1996 and has had continuous service in the coal mining industry since that date. I do however note that Mr Miller was retrenched on
17 October 1997 and obtained further employment in the coal industry with Dewinto commencing 22 August 1998. This approximate 10 month period is not taken into account in determining his accrued entitlement based on the terms of the certified agreement. Accordingly Mr Miller has 19.15 years of continuous service equating to - - -

PN27

THE COMMISSIONER: No, 9.15.

PN28

MR ENDACOTT: Sorry:

PN29

9.15 years of continuous service equating to 15 weeks of long service leave -

PN30

and then it indicates - - -

PN31

THE COMMISSIONER: In simplicita what you say is he's employed firstly on 9 October 1996 to date, it's that period less the 10 months?

PN32

MR ENDACOTT: That's correct, and the rest of the correspondence which the Commission can peruse for itself, basically says that he wants to take three weeks' long service leave. Now - - -

PN33

THE COMMISSIONER: Subject to the employer veto that's in the middle of those provisions.

PN34

MR ENDACOTT: Yes. Now, the problem is, Commissioner, is that - - -

PN35

THE COMMISSIONER: So what's the issue? Is the issue that he's not entitled to it in the company's view or that it's inconvenient that he take it?

PN36

MR ENDACOTT: Well, the issue is, is that the company doesn't believe he has 10 years of - doesn't believe that he has 10 years - sorry. He doesn't have 13 weeks of long service leave accrued, or greater than eight years continuous service in the coal mining industry. Now, the reason for that is they've been told that, I understand, by the Long Service Leave Fund.

PN37

THE COMMISSIONER: What has the fund said?

PN38

MR ENDACOTT: Well, the fund has said, if I've got it right, is they've said that, because Mr Miller is a casual employee, he accrues long service leave at the number of ordinary hours as a proportion of 35 that he works in a week. Now - - -

PN39

THE COMMISSIONER: Is there a provision in the agreement about this?

PN40

MR ENDACOTT: No, there's not. There's not a provision in the award or anywhere about it, and what I might do, Commissioner, if I take you to the service history. I'll give you an example of where it arises, and that was the other document that says - entitled Auscoal Superannuation I tendered.

PN41

THE COMMISSIONER: Yes.

PN42

MR ENDACOTT: If you go down to - this is the first page - you go down to the second last - this is in the second last table, it's got 217 days in there.

PN43

THE COMMISSIONER: Yes.

PN44

MR ENDACOTT: This is on the first page, Commissioner.

PN45

THE COMMISSIONER: Yes, I have it.

PN46

MR ENDACOTT: So Mining and Maintenance Support P/L, it's got 2 July 2002 to 30 June 2003 and then it says here, 213 days. Well, he worked that entire period - - -

PN47

THE COMMISSIONER: 217 days.

PN48

MR ENDACOTT: 217 days, he worked that entire period, but they've only accrued him for working two hundred - instead of a full year - 217 days. Well, if you actually look at the period that he was employed, it says there that what is two days short of a year, they're saying is only 217 days. Now, the industry service record in fact has nothing to do with - that's kept by the fund - has nothing to do with Mr Miller's entitlement. If the fund was to mis-record someone's industry service, because they don't know what they're doing, which is basically what's happening, it is of no consequence to Mr Miller's entitlement. What is of a consequence to is when Mr Miller's approached the employer and said, I want to take it.

PN49

The employer is saying, well, I'm not letting you because I've spoken to the fund and the fund reimburses the employer as they're statutorily required, and as you could imagine, the boss is not going to pay the worker what he's entitled to because the fund is saying, well, we don't recognise the accrual.

PN50

THE COMMISSIONER: Yes. There's a certain logic to that.

PN51

MR ENDACOTT: Yes, certain logic, and I've said this to the company. I've spoken to the fund and in fact showed the fund Mr Miller's record - - -

PN52

THE COMMISSIONER: Is this a Damstra case again?

PN53

MR ENDACOTT: Well, it's similar to Damstra.

PN54

THE COMMISSIONER: To enlighten the other side, Damstra Mining Services have been before me as well about a matter that sounds slightly similar.

PN55

MR ENDACOTT: It's slightly similar in that the errors in the fund, or what the fund's telling people is affecting employees in entitlements. It's different in that in the case of Damstra they just weren't - it was Roach Mining, but it was for the person's employment with Damstra. They're just not acknowledging he was employed in the industry, which is a slightly different test. Now - - -

PN56

THE COMMISSIONER: What if I expressed a view or determined the matter pursuant to the power granted by section 170LW through the certified agreement, if I said that in my view he should be allowed to have that period of long service leave or some other figure or whatever, right, and the fund still said, no, what happens then?

PN57

MR ENDACOTT: Well, the fund can't say no. It can't say no at the moment and statutorily can't say no - - -

PN58

THE COMMISSIONER: It is saying that.

PN59

MR ENDACOTT: Yes, when I say that, it obviously can say no, but it can't say in the sense that it is obliged under the funding Act, under the Coal Mining Long Service Leave - - -

PN60

THE COMMISSIONER: Perhaps I should put my question more bluntly. How would you enforce a determination from me?

PN61

MR ENDACOTT: Well, how would we enforce it? Well, we can only enforce
it - - -

PN62

THE COMMISSIONER: If it went your way?

PN63

MR ENDACOTT: Well, we can only enforce a determination against an employer because the fund is not set up for the benefit of employees. It's only set up for the benefit of employers and what would have to happen is the fund would have to - I mean, the employer would have to suit the fund because the fund owes nothing to Mr Miller or any employee in Mr Miller's case. It only owes an obligation to the employer, and in fact I've met with the fund because I was concerned about them, what I would say, is their mis-administration with respect to how they are informing employers they will reimburse them and Mr Miller was one of the files I showed to the company and I've said to the fund, in the case of someone like Mr Miller you are required to give the money to the employer.

PN64

So it's not a question of - but there's nothing I can do with the fund, because like I said, there's no obligation between us and the fund. For our position, it's clear, concise and unambiguous, even though Mr - - -

PN65

THE COMMISSIONER: As it always is.

PN66

MR ENDACOTT: Yes. Well, even though Mr Miller is a casual employee, he still has continuous service and meets the test. The provision of describing an employee's long service leave entitlement based upon service doesn't exclude casuals or proportionally. I mean, the New South Wales Long Service Leave Act operates similarly. Obviously it has a different accrual rate. So we say - - -

PN67

THE COMMISSIONER: But can a casual earn exactly the same rate of long service as a full time employee?

PN68

MR ENDACOTT: Yes, without a doubt and that - - -

PN69

THE COMMISSIONER: I don't claim to be a great expert on long service leave, that's why I'm asking.

PN70

MR ENDACOTT: Yes. Well, it comes down to the definition of continuous service. If they meet the definition of continuous service, then they accrue at the same rate. So we say this, that the employee is entitled to - now, I will say one thing with respect to Mr Miller. Mr Miller was very fortunate as of last week to gain employment with Coal and Allied, and when I say fortunate, I wouldn't want someone to say that I was saying anyone working for Coal and Allied is in a fortunate position since it's owned by Rio, but he's got a permanent job and he will be paid under the terms of the certified agreement which is negotiated with the unions, quite reasonable, but - and I spoke to Mr Garvin. I said, look, the application concerns Mr Miller specifically.

PN71

Now, what do you want to do about the application, because we still have a dispute about the labour company acknowledges accrual, because they have lots and lots of casuals, and the company's view was that, look, this is an issue that's beyond Mr Miller and that - they'll speak for themselves, of course, Commissioner, but indicated that we probably should go ahead with the proceedings because they do want this issue about how someone is to be paid to be resolved.

PN72

THE COMMISSIONER: Whether my determination would do that, I'm not sure, because what I would intend to do is to analyse closely the situation of Mr Miller. If that can then be extrapolated to other employees, well, good luck to you. But let me say this, before hearing the employer so that you'll be aware of my view on this matter. I don't know at this stage whether Mr Miller is entitled or not entitled to long service leave, but you should know that I wouldn't be influenced by the company's ability or inability to get the money back from Auscoal. This would purely be a matter of whether Mr Miller was entitled pursuant to the terms of the certified agreement to accrue the long service leave and then there's another argument about whether he can take it, but if he's leaving your employ, that probably is a moot point.

PN73

I'm not also minded to place any absolute reliance upon the Auscoal document. I will want to see the employment records, other employment records, if they exist, for Mr Miller and I'd determine it on that basis. But an argument, to give you some forewarning, that you would decline possibly to pay if he was entitled on the ground of non-recovery or difficulty in recovering wouldn't swim with me. This will be whether he's entitled or not. I'll hear from the employer now, Mr Endacott.

PN74

MR GARVIN: Thank you, Commissioner. I'd just like to apologise for my late arrival today.

PN75

THE COMMISSIONER: No problem.

PN76

MR GARVIN: Thank you for bearing with me on that. Just on the notification, the company weren't refusing any actual rights to long service leave. We were definitely arguing about the quantum. As far as Auscoal is concerned, our position is pretty simple. We say that when we look at retrenchment and credit for prior service, and when we look at payment and when we look at this particular individual who, fortunately for him, has now got a job with
Rio Tinto - lucky man - and credit for prior service on the face of it does seem straightforward to us.

PN77

Our problem with that credit for prior service is that it's open ended. It just says that if you were employed before and you're made redundant, then when you come back you're given credit for that prior service if you're re-hired. What we say is that there should be a limit on that. It shouldn't go for six months, 12 months, 10 years.

PN78

THE COMMISSIONER: Well, it's limited solely by the terms of the certified agreement.

PN79

MR GARVIN: Yes, and that's where - - -

PN80

THE COMMISSIONER: As I understand it, under the certified agreement, please tell me if I'm wrong, I've just read it for the last time in the last few minutes, that if you're out for up to three months after a retrenchment, then that's regarded as service, that three month period. If it exceeds three months you get the period from when you started up to the retrenchment and a stopping point there and it starts again when you come back and start work again. So therefore if you had 10 years in the industry, one year off being retrenched and didn't get another job, go back to work, you've got nine years.

PN81

Now, I can't argue with you or I won't argue with you at all, but I wouldn't argue with you hypothetically about whether what it says is correct or the way it works is correct. All I can do is look at Mr Miller and, based on proper proof of the periods, and then it seems to me, to quote Mr Endacott, a simple arithmetic exercise.

PN82

MR GARVIN: Well, 22.2.5, and I think that's what - any broken service because of a change of employment not exceeding three months. We take the view that this change of employment went on for 10 months. Our position, Commissioner, is that the spirit of this agreement, and I wasn't part of writing the agreement or a part of the agreement at all, but we have a concern with where there is a break of service, and this break of service has gone on for 10 months, the way that 22.7.1, it wouldn't matter how long that break went. They would accrue long service leave which would be credited on re-employment. That is the way it reads.

PN83

Our concern with that is that it's too open ended and we've come to the Commission today asking the Commission to have a look at that. I'm not going to get into anything about - - -

PN84

THE COMMISSIONER: Yes, but that could be interpreted by me as tantamount to the verbal application that I would amend the agreement. No can do. The agreement stands. I can amend this agreement largely on the grounds of ambiguity and I've had this put to me before, that an agreement has what one side believes to be an unfortunate consequence, but there's no ambiguity. It just isn't very lovable in the way that it works out. I can't do that. The agreement came before me for certification. It met the standards that it had to meet to be certified. I properly certified it, I believe, on 13 April 2005. That was my role in it, to see if it complied with the law. Through it went. It was the role of the parties to negotiate an agreement between themselves which satisfied their particular circumstances which was the purpose of certified agreements as opposed to one size fits all awards.

PN85

Now, I note your caveat that you had no involvement in it but you're stuck with the agreement as written. Now, I'm not saying yet that it reads in such a way as to entitle Mr Miller. I don't know. I've got bits and pieces of information before me. But in a peaceful way, I warn you that it will be based purely on what's written in the agreement. If there's a problem with the interpretation of the agreement as opposed to the application of it, then the Federal Court will tell you what it means.

PN86

MR GARVIN: All right then. Well, from where - - -

PN87

THE COMMISSIONER: Is this a good time for conciliation?

PN88

MR GARVIN: Yes.

PN89

THE COMMISSIONER: I think it might. I don't think anybody should prejudice themselves on transcript at this stage.

PN90

MR GARVIN: I've got no problems at all, Commissioner.

PN91

THE COMMISSIONER: Agreed between the parties, we're adjourned into conciliation.

<NO FURTHER PROCEEDINGS RECORDED